What are the Advantages and Disadvantages of Bitcoin?

After learning about mining, you are probably wondering what the overall advantages and disadvantages of Bitcoin are. There are quite a few advantages that make Bitcoin a one of a kind digital currency that has no likeness. Of course, because nothing is perfect, Bitcoin does have its flaws. Both will be discussed in this guide. Read on to discover them and learn more about this crypto currency.

Bitcoin Advantages:

Freedom in Payment

• With Bitcoin it is very possible to be able to send and get money anywhere in the world at any given time.
• You don’t have to worry about crossing borders, rescheduling for bank holidays, or any other limitations one might think will occur when transferring money.
• You are in control of your money with Bitcoin. There is no central authority figure in the Bitcoin network.

Control and Security

• Allowing users to be in control of their transactions help keep Bitcoin safe for the network.
• Merchants cannot charge extra fees on anything without being noticed. They must talk with the consumer before adding any charges.
• Payments in Bitcoin can be made and finalized without one’s personal information being tied to the transactions.
• Due to the fact that personal information is kept hidden from prying eyes, Bitcoin protects against identity theft.
• Bitcoin can be backed up and encrypted to ensure the safety of your money.

Information is Transparent

• With the block chain, all finalized transactions are available for everyone to see, however personal information is hidden.
• Your public address is what is visible; however, your personal information is not tied to this.
• Anyone at anytime can verify transactions in the Bitcoin block chain.
• Bitcoin protocol cannot be manipulated by any person, organization, or government. This is due to Bitcoin being cryptographically secure.

Very Low Fees

• Currently there are either no fees, or very low fees within Bitcoin payments.
• With transactions, users might include fees in order to process the transactions faster. The higher the fee, the more priority it gets within the network and the quicker it gets processed.
• Digital Currency exchanges help merchant process transactions by converting bitcoins into fiat currency. These services generally have lower fees than credit cards and PayPal.

Fewer Risks for Merchants

• Due to the fact that Bitcoin transactions cannot be reversed, do not carry with them personal information, and are secure, merchants are protected from potential losses that might occur from fraud.
• With Bitcoin, merchants are able to do business where crime rates and fraud rates may be high. This is because it is very hard to cheat or con anyone in Bitcoin due to the public ledger, otherwise known as the block chain.

Now that we’ve covered the basic advantages, we can move on to the disadvantages. There are three main ones that need to be pointed out. This is so you can get an overall idea of what to expect with Bitcoin. We don’t want anything to be hidden from our viewers.

Bitcoin Disadvantages:

Lack of Awareness & Understanding

• Fact is many people are still unaware of digital currencies and Bitcoin.
• People need to be educated about Bitcoin to be able to apply it to their lives.
• Networking is a must to spread the word on Bitcoin.
• Businesses are accepting bitcoins because of the advantages, but the list is relatively small compared to physical currencies.
• Companies like Tigerdirect and Overstock accepting Bitcoin as payment is great. However, if they do not have a knowledgeable staff that understands digital currencies, how will they help customers understand and use Bitcoin for transactions?
• The workers need to be educated on Bitcoin so that they can help the customers. This will definitely take some time and effort. Otherwise, what is the benefit of such large companies accepting Bitcoin if its staff doesn’t even know what digital currencies are?

Risk and Volatility

• Bitcoin has volatility mainly due to the fact that there is a limited amount of coins and the demand for them increases by each passing day.
• However, it is expected that the volatility will decrease as more time goes on.
• As more businesses, medias, and trading centers begin to accept Bitcoin, its’ price will eventually settle down.
• Currently, Bitcoin’s price bounces everyday mainly due to current events that are related to digital currencies.

Still Developing

• Bitcoin is still at its infancy stage with incomplete features that are in development.
• To make the digital currency more secure and accessible, new features, tools, and services are currently being developed.
• Bitcoin has some growth to do before it comes to its full and final potential.
• This is because Bitcoin is just starting out, and it needs to work out its problems just like how any currency in its beginning stage would need to.

In Conclusion

There you have it folks. With this, you now have both sides of the coin. Bitcoin, as you can see, is not perfect. It does have many advantages that physical currencies do not provide its users; however, it also has its disadvantages. This is mostly due to the fact that Bitcoin is still a relatively young and new currency. People are just beginning to become more aware of it. In order for Bitcoin to succeed, more people need to understand what it is and not let their preconceived notions distort the concept of digital currencies.

There are always pros and cons to any situation in life. To be able to make a good decision, you need to weigh the good and bad thoroughly before finalizing your choice. Do the same for Bitcoin. Understand what it is, and decide what you want to do with it. We, at Coinreport give you the facts; you are the ones who make your decision.

Photo Credit: Shutterstock